Manufacture test for excise applies when assembled components become a commercially different ready-to-use product with distinct identity and use.

Assembling imported tubes, connectors, filters, caps and allied components into a ready-to-use custom pack for heart surgery amounted to manufacture because the process produced a commercially different product with a distinct identity, name, character and use. The bulk imported items could not be used as such for the intended surgical purpose, and cutting, joining, packing and sterilisation transformed them into a specific medical pack whose components no longer retained separate commercial identity for that purpose. Internal literature and manufacturing flow documents were treated as confirming the manufacturing activity. On that basis, the custom pack was classifiable as excisable goods and the duty demand was set aside.

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Issues: Whether the activity of assembling imported tubes, connectors, filters, caps and allied components into a custom pack for heart surgery amounted to manufacture and rendered the product excisable.

Analysis: The majority held that the decisive test is not the complexity of the process but whether a new and commercially different product emerges with a distinct identity, name, character and use. The imported items were in bulk and could not be used as such for the intended surgical purpose. After cutting, joining, packing and sterilisation, the end product became a ready-to-use custom pack for a specific medical function, and the assembled components no longer retained their commercial identity as separate usable items for that purpose. The majority also treated the literature and internal manufacturing flow documents as confirming that the activity was undertaken as a manufacturing process. On that basis, the product was held classifiable as excisable goods.

Conclusion: The activity constituted manufacture and the custom pack was excisable. The appeal was therefore allowed and the duty demand set aside.

Ratio Decidendi: Assembling imported components into a ready-to-use commercially different product with a distinct identity, name, character and use amounts to manufacture for excise purposes.

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